WSR 25-18-070

PROPOSED RULES

DEPARTMENT OF HEALTH

(Pharmacy Quality Assurance Commission)

[Filed August 29, 2025, 8:43 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 23-20-115.

Title of Rule and Other Identifying Information: Alternate distribution models for a dispensed prescription drug for the purpose of redispensing or subsequent administration to a patient. The pharmacy quality assurance commission (commission) is proposing new WAC 246-945-416 Alternate distribution models, related to how alternate distribution models for prescribed and dispensed medications may be used by dispensing facilities and receiving facilities regulated by the commission that choose to use such models.

Hearing Location(s): On October 16, 2025, at 1:30 p.m., at the Labor and Industries Building, 7273 Linderson Way S.W., Tumwater, WA 98501; or virtually via Zoom. To access the meeting, go to https://zoom.us/join or https://us02web.zoom.us/j/86309299195 and use Webinar ID 863 0929 9195. The access options include One-tap mobile +12532158782,,86309299195# or +16699009128,,86309299195#; or telephone (for higher quality, dial a number based on your current location): 1-253-215-8782, 1-669-900-9128, 1-346-248-7799, 1-669-444-9171, 1-386-347-5053, 1-564-217-2000, 1-646-558-8656, 1-646-931-3860, 1-301-715-8592, or 1-312-626-6799, Webinar ID 861 1495 8466. International numbers available at https://us02web.zoom.us/u/kdLNo6unOZ.

Date of Intended Adoption: October 16, 2025.

Submit Written Comments to: Joshua Munroe, P.O. Box 47852, Olympia, WA 98504-7852, email PharmacyRules@doh.wa.gov, fax 360-236-2901, https://fortress.wa.gov/doh/policyreview, beginning the date and time of filing, by October 2, 2025, 11:59 p.m.

Assistance for Persons with Disabilities: Contact Joshua Munroe, phone 360-502-5058, fax 360-236-2901, TTY 711, email PharmacyRules@doh.wa.gov, by October 2, 2025.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The commission initiated rule making in 2023 on the topic of drug transfer practices such as "white bagging" and "brown bagging," now referred to in rule-making documents as "alternate distribution models" (ADM). These models outline the delivery method of filled prescriptions such as a specialty medication from the dispensing facility that produces or compounds it to a receiving facility at which the medication is administered to the patient.

Following ADM discussions held at commission business and task force meetings, the commission determined that it needed to consider adding more robust regulatory standards to ensure product integrity and patient safety in its rules chapter. Commission staff drafted rule language for a new section WAC 246-945-416 that establishes definitions relating to ADM, allows and prohibits actions for facilities that choose to utilize ADM, and sets a requirement for dispensing facilities and receiving facilities utilizing such models with one another to create a contract or agreement between both parties.

The anticipated effect of the proposed rules is to establish regulatory standards for alternate distribution models so that dispensing facilities and receiving facilities regulated by the commission can guarantee greater patient safety and product integrity should those facilities choose to use such models. This would be accomplished through limiting the types of distribution models dispensing and receiving facilities are allowed to use, and by requiring a contract or agreement between parties to reduce miscommunications that lead to distribution, storage, and handling errors for medications for which alternate distribution models would apply.

Reasons Supporting Proposal: According to a 2018 report prepared by the National Association of Boards of Pharmacy, white bagging refers to "the distribution of patient-specific medication from a pharmacy … to the physician's office, hospital, or clinic for administration" and brown bagging refers to "the dispensing of a medication from a pharmacy … directly to the patient, who then transports the medication(s) to the physician's office for administration."1 Certain drugs are often the subject of white bagging and brown bagging practices. In 2015, 28 percent of medical benefit drugs—drugs that are injected or infused by a healthcare professional in an infusion center—were distributed to physician offices via brown bagging.2 As of 2016, 28 percent of oncology drugs were distributed through white bagging and brown bagging practices.3

Alternate distribution models represent a different approach to the traditional chain-of-custody for prescribed medications. Concerns have been raised over ensuring the integrity and quality of these medications is maintained if such practices are used by prescribers, hospitals, or patients because these practices can create an unknown chain of custody. The commission cited a lack of clear regulatory standards on these distribution models in Washington as justification for rule making, and later explained that the intent of the rule making was to establish a clear understanding of what types of distribution models are allowed and to reduce potential miscommunication between dispensing and receiving facilities that could result in loss of product and delayed care to patients.

Statutory Authority for Adoption: RCW 18.64.005.

Statute Being Implemented: RCW 18.64.005.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Pharmacy quality assurance commission, governmental.

Name of Agency Personnel Responsible for Drafting and Implementation: Joshua Munroe, 111 Israel Road S.E., Tumwater, WA 98501, 360-502-5058; Enforcement: Marlee O'Neill, 111 Israel Road S.E., Tumwater, WA 98501, 360-480-9108.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Joshua Munroe, P.O. Box 47852, Olympia, WA 98504-7852, phone 360-502-5058, fax 360-236-2901, TTY 711, email PharmacyRules@doh.wa.gov.

This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:

Is exempt under RCW 19.85.025(3) as the rules only correct typographical errors, make address or name changes, or clarify language of a rule without changing its effect.

Explanation of exemptions: WAC 246-945-416(1) includes definitions for specific terminology used throughout the new chapter and exempt from the significant analysis because it proposes clarifying language.

Scope of exemption for rule proposal:

Is partially exempt:

Explanation of partial exemptions:

The proposed rule does not impose more-than-minor costs on businesses. Following is a summary of the agency's analysis showing how costs were calculated.

A brief description of the proposed rule, including the current situation/rule, followed by the history of the issue and why the proposed rule is needed. A description of the probable compliance requirements and the kinds of professional services that a small business is likely to need in order to comply with the proposed rule: The commission initiated rule making in 2023 on the topic of drug transfer practices such as "white bagging" and "brown bagging," now referred to in rule-making documents as "alternate distribution models." These models outline the delivery method of filled prescriptions such as a specialty medication from the dispensing facility that produces or compounds it to a receiving facility at which the medication is administered to the patient. The commission cited a lack of clear regulatory standards on these distribution models in Washington state as justification for rule making.

According to a 2018 report prepared by the National Association of Boards of Pharmacy, white bagging refers to "the distribution of patient-specific medication from a pharmacy … to the physician's office, hospital, or clinic for administration" and brown bagging refers to "the dispensing of a medication from a pharmacy … directly to the patient, who then transports the medication(s) to the physician's office for administration."4 Certain drugs are often the subject of white bagging and brown bagging practices. In 2015, 28 percent of medical benefit drugs, drugs that are injected or infused by a health care professional in an infusion center, were distributed to physician offices via brown bagging.5 As of 2016, 28 percent of oncology drugs were distributed through white bagging and brown bagging practices.6

These distribution models represent a different approach to the traditional chain-of-custody for prescribed medications. Concerns have been raised over ensuring the integrity and quality of these medications is maintained if such practices are used because these practices can create an unknown chain of custody.

Following discussions held at commission business and task force meetings, the commission determined that it needed to consider adding more robust regulatory standards for dispensing facilities and receiving facilities that may utilize alternate distribution models to ensure product integrity and patient safety in its rules chapter.

* As explained in the significant analysis, pharmacies are not required to engage with alternate distribution models as described in WAC 246-945-416. For pharmacies that could be classified as a dispensing facility or a receiving facility and choose to utilize such models, they would need to comply with any cost or regulatory elements described in the proposed rule.

** The employment security department reported 267 businesses categorized as pharmacies and drug stores, but department of health (department) staff reported the number of pharmacies as of April 2024, with 1,283 facilities being standalone pharmacies and 110 facilities being hospital pharmacies.

Description: The proposed rule establishes definitions in subsection (1) relating to alternate distribution models, defining the types of facilities that dispense or receive medications under such models. The subsection also describes what qualifies as a "filled prescription" and an "injectable medication," for purposes of this rule. As indicated above, this subsection is exempt from analysis as it only clarifies the use of terms uses throughout the section.

Subsection (2) prohibits the practice known as "brown bagging," in which a receiving facility takes possession of a filled prescription dispensed and delivered from a dispensing facility that was previously received, stored, and handled by the patient or patient's representative.

Subsection (3) allows for a receiving facility to take possession of filled prescriptions delivered to it by the dispensing facility if certain conditions are met. This action is allowed only if the receiving facility cannot directly procure the filled prescription through standard distribution channels, or if the receiving facility cannot compound the filled prescription at the health care facility where that prescription would be administered to the patient by a health care professional.

Subsection (4) requires a written contract or agreement between the receiving and dispensing facilities that describes procedures such as a delivery system and the responsibilities of each party.

Subsection (5) identifies the filled prescriptions to which the rule does not apply. Exempt prescriptions are filled prescriptions sent from a dispensing facility to a receiving facility where both facilities are under common ownership, filled prescriptions sent by a compounding pharmacy or registered outsourcing facility at the request and specification of the receiving facility, or filled prescriptions for home infusion patients.

The proposed rule is designed to establish a clear chain-of-custody for filled prescriptions and decrease instances of those prescriptions becoming unusable due to delivery method or miscommunication between facilities resulting in incorrect prescriptions being sent to the receiving facility.

Cost(s): The purpose of WAC 246-945-416 is to establish enforceable regulatory guidelines for alternate distribution models that are already in use by dispensing and receiving facilities regulated by the commission in Washington. The use of such distribution models is also optional for facilities identified in the proposed section of rule, so any reported costs and benefits are not a requirement for all regulated facilities but only those that choose to engage with alternate distribution models. Both one-time and ongoing costs for the proposed rule are associated.

One-time costs: The one-time cost incurred for the purpose of complying with the proposed rule is the development of a contract or agreement between the dispensing facility and receiving facility, per WAC 246-945-416(4). Commission staff estimate, based on consultation with pharmacists and comparison to similar processes, that developing a contract or agreement would require between one and three hours of staff time depending on how the facilities structure the core elements such as delivery system procedures and party responsibilities, and whether legal counsel would be required to review a drafted contract.

The commission and department assume that the responsibility to develop the policies and procedures will be given to pharmacy assistants, pharmacy technicians, or equivalent administrative staff, with final approval of the policies and procedures given either by a pharmacist or attorney. It is expected that the practitioner or pharmacist would take an additional one to two hours to review and approve the drafted policies and procedures.

* The average hourly wage for practitioners, excluding dentists, is derived from the 2024 wage statistics reported by the United States (U.S.) Bureau of Labor and Statistics. Average hourly wage rounded up to the next whole number.7

Using the above time estimates, the lower-cost scenario would include one hour of contract or agreement development time by a pharmacy assistant or pharmacy aide and one hour of review time by a pharmacist. Applying the wage data from Table 2, a receiving facility or dispensing facility would expect to incur $97 as a low-end cost.

The higher-cost scenario is based off three hours of contract or agreement drafting time by a pharmacist working in the dispensing or receiving facility and an additional two hours of review time by an attorney. Therefore, a facility that would need to comply with WAC 246-945-416 would expect to incur $391 as a one-time cost. While it is possible that costs could be higher should an attorney be asked to both draft a contract and help with the review of the document, this circumstance was deemed unlikely.

• Low (one hour drafting + one hour review): $97

• High (three hours drafting + two hours review): $391

Recurrent/ongoing costs: Dispensing facilities and receiving facilities would need to review the existing contract or agreement. Commission staff estimate that, at most, one hour would be needed from a facility to conduct the review. This task could be assigned to a pharmacy technician, pharmacist, or attorney familiar with the existing contract or agreement. As a result, the annual ongoing cost associated with the alternate distribution model rule would fall into the following range:

• Low (one hour review by an attorney): $22

• High (one hour review by an attorney): $83

** The one-time and ongoing costs reported in this table reflect a single contract or agreement developed by a receiving or dispensing facility. A facility could encounter higher costs if it develops multiple contracts or agreements with additional facilities, but the commission determined this would be rare.

Analysis on if the proposed rule may impose more-than-minor costs for businesses in the industry. Includes a summary of how the costs were calculated: No, the costs of the proposed rule, at most $391 one-time costs and $83 in annual ongoing costs per contract or agreement for each facility choosing to use alternate distribution models, are less than the minor cost threshold of $19,161.74 for pharmacies.

Summary of how the costs were calculated: The range of costs associated with drafting and reviewing a contract or agreement between a dispensing facility and a receiving facility is calculated by assessing the average wage amounts reported by the U.S. Bureau of Labor and Statistics for pharmacists, pharmacy technicians, pharmacy assistants/aides, administrative support occupations, and attorneys.

Low-end cost calculation: One hour of drafting time by a pharmacy assistant/aide and one hour review time by a pharmacist. One hour of review time by a pharmacy technician annually.

High-end cost calculation: Three hours of drafting time by a pharmacist and two hours review time by an attorney. One hour of review time by an attorney annually.

A copy of the detailed cost calculations may be obtained by contacting Joshua Munroe, P.O. Box 47852, Olympia, WA 98504-7852, phone 360-502-5058, fax 360-236-2260, TTY 711, email PharmacyRules@doh.wa.gov.

August 29, 2025

Hawkins DeFrance, PharmD, Chair

Pharmacy Quality Assurance Commission

RDS-6447.2